Asia playing catch-up in d-cinema

North American firms are leading the way

While a new wave of digital 3-D movies promises to energize the film business, Asia lags behind the rest of the world in making the d-cinema transition.

North America is furthest along in the rollout, followed by Europe and then Asia, according to Michael Lewis, CEO of Real D, a 3-D provider.

North America has a developing business model that calls for distributors to pony up "virtual license fees" that allow exhibitors to invest in the new digital projection systems used for 3-D presentations, but Europe and Asia have not yet adopted similar business models.

"Asia is somewhat in the same position as Europe is in," Lewis said. "The digital business arrangements have not been worked out, and you are dealing with more indigenous content, which means that more of the digital projector has to be paid for by the exhibitors."

Lewis estimates that 3-D digital cinema installations include roughly 14 installations in Korea, 16 in Australia and three in Japan. Other sources put the number of 3-D screens in Korea, where chains like CGV and Lotte have led the transition, as high as 20.

In the states, such films as the special editions of "The Polar Express," "Superman Returns" and "Harry Potter and the Order of the Phoenix," all presented in part or in whole in Imax 3D as well as the animated 3-D flicks "Chicken Little" and "Monster House" have shown that audiences are eager to don new, high-tech 3-D specs. And, in turn, they are encouraging more and more exhibitors to invest in 3-D systems.

By 2009, a clash of two potential 3-D titans looms as DreamWorks' "Alien vs. Monsters" and James Cameron's sci-fi tale "Avatar" plot worldwide 3-D rollouts.

Those films also will certainly encourage Asian theater owners to jump on board. But when it comes to local production, Asia faces its own chicken-and-egg problem. Local 3-D productions are needed to further encourage exhibitors to outfit 3-D screens, but more 3-D screens are needed before producers invest in more expensive 3-D films.

3-D Hollywood features may be available in the region. But the production of local 3-D content as well as the "Dimensionalization" of content from the region's film libraries -- that is to say, creating 3-D versions of existing 2-D films -- has only just begun.

David Seigle, CEO of In-Three, which has developed its own Dimensionalization process, said that before producers can commit to 3-D projects, they "need to have a certain level of an installed base within the market in order for the producers to receive a good return on investment."

In-Three is slowly beginning to have conversations in the Asian region. "The number of theaters projected to be coming online is becoming meaningful, which is why there is so much interest today in America. Content is driving the increase," Seigle said. "But in Asia there are still not meaningful numbers of 3-D theaters. The interest is growing (in Dimensionalization), but it may take a little while, or an American market to make it an interesting pursuit."

In some markets, Imax has begun to pave the way.

"There is a significant interest in 3-D film presentation in China and throughout Asia," said Larry O'Reilly, Imax executive vp theatrical development. "For example, 'Harry Potter and the Order of the Phoenix' played day-and-date in an Imax theater in Hong Kong with a couple hundred seats. That one screen has already grossed $640,000 from that one title."

Imax's own installations throughout the regions are still limited, though there has been some recent movement. Last month, Imax announced a deal with Wanda Cinema Line Corp., which will install 10 Imax theaters in the People's Republic of China. These are expected to be deployed by the end of 2010 and bring the total number of Imax theaters scheduled to open in the region to 39. Most of them will support 3-D content.

With the hope of drumming up wider interest, one Imax screen is being installed at a Beijing Olympics site, to display both 2-D and 3-D content. O'Reilly explained, "It will be part of the cultural events of the Chinese government."

The Asian Film Market plans to confront the challenges the new 3-D era poses Tuesday when the Busan Film Commission sponsors a 3-D seminar examining the costs of making and exhibiting movies in 3-D. In addition, it will sponsor individual demonstrations from such companies as In-Three, Master Image Co., Visual Communications, Stereopia Co. and Big I Entertainment.

Carolyn Giardina reported from Los Angeles; Gregg Kilday reported from Busan, South Korea.